Did you catch the recent NAHB report on how much lumber now adds to new home prices?

A couple weeks later they delivered the kicker: New home production is down by nearly 10 percent at a time when it should be surging up 10 percent or more.

Strange times? That’s hardly the word for it.

One analyst even asks, “How far does $50,000 worth of lumber go today?” Not as far as you would like. Compare May 2020 lumber prices to May 2021. The industry lost an amazing amount of capacity. Last year $50,000 worth of lumber supplied 10 new single-family homes. Today? Just two.

No one has a quick way out of this. Wood prices are mired in a long-running trade dispute with Canada. Lumber mills can’t keep up with demand. Now, with lumber backlogs extending to out to … well, forever … any semblance of normal pricing isn’t likely this year. Fingers crossed on next year.

Throw in still-attractive mortgage rates, a damaged supply chain, and a consumer economy ready to rumble. It’s a challenge unlike any the industry has ever faced.

Alternative Methods

How do you keep projects on track without damaging margins? Some builders are resorting to alternative methods, says industry veteran Todd Gluski, a senior marketing official at building products manufacturer Ox Engineered Products.

“I know one home builder in Michigan with a teardown and replace project. He went ahead and bought his framing lumber before the old house was torn down,” he reports. Locking up valuable capital in lumber may not be the wisest cash flow decision, but the supply situation is growing desperate.

Welcome Lifeline

Gluski understands the worry. His company offers an increasingly popular alternative to OSB structural sheathing that more and more builders are turning to. “I hear the concern in their voices every day. They’re all scrambling to keep projects moving and close to budget,” Gluski says.

Fortunately, Gluski and his team can offer reassurance on sheathing. “We’ve been able to accommodate most customers. Yes, we have slightly extended lead times. But what building supplier today doesn’t? It’s a much better situation than what many face with OSB,” he explains. “We’re working hard to meet every builder’s needs and schedule.”

Builders are finding the transition away from OSB surprisingly smooth and advantageous. For example, Ox Engineered Products’ OX-IS is a code-compliant four-in-one sheathing panel that meets all structural, continuous insulation, WRB, and air barrier requirements. “It’s one trip around the house,” notes Gluski. “House wrap isn’t needed.”

No 2x6s?

It’s also the least expensive way to build an R-21 wall, a requirement in many jurisdictions. “Builders don’t need to use 2x6s. They can still meet an R-21 rating requirement with less expensive 2x4s because 1-inch OX-IS is rated R-6,” Gluski says. “Sticking with 2x4s is a huge savings right there.”

There is no timetable on how long the new normal will last. But it’s good to know there are materials available now that can help you meet project delivery schedules and margin expectations.

Learn more about how structural insulated sheathing from Ox Engineered Products can help keep your projects moving and on-budget.